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How to Make the IRS Unhappy and Avoid Probate

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    How to Make the IRS Unhappy and Avoid Probate

    • St. Petersburg Estate Planning and Probate Attorney has over six decades of experience helping people secure their legacy. We have a proven track record of success for our clients. Our law firm has been around for a long time because we get great results and don’t take advantage of people. 
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    St. Petersburg Estate Planning and Probate Attorney stands out due to our commitment to client success and our extensive expertise in estate planning law. Our attorneys have consistently secured favorable outcomes for clients, earning reputations for diligence, compassion, and legal acumen. Simply put, they are the toughest around, but also fair.  Our firm is dedicated to providing personalized service, ensuring that each client receives the attention and support they deserve throughout their legal journey. You can count on our Estate Planning and Probate Attorney to have your back.

    A client recently contacted us about the future inheritance of a house owned by her significant other, who had a very limited life expectancy. They knew enough to be dangerous.

    To avoid probate, the significant other was signing a deed transferring the house to her. He explained that accomplished two goals – it put the house in her name and avoided probate. At all costs he did not want her to have to deal with probate which would delay her obtaining title to the house. The plan was to sell the house at his death.

    If they had done this transfer the IRS would have been very happy because her basis in the house would have been his cost which was significantly below fair market value. Upon her sale of the house, income taxes would be owed.

    In lieu of using a deed transferring the house to her, we recommended that an enhanced life estate deed be used. This avoids probate because upon death, the simple recording of a death certificate puts the title in her name without probate. Furthermore, the transfer does not take place until death so her basis in the property is stepped up to fair market value. Accordingly, upon the sale of the house her basis is much higher and no gain would be recognized and no tax due.

    Hence, a very unhappy IRS!

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